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US tells Iran to 'look in the mirror' after Rouhani blames it for Ahvaz attack

The exchange follows threats from Iran's Revolutionary Guards to avenge the assault on a military parade. Iran-US ties have worsened after President Donald Trump renewed sanctions on Tehran over its nuclear program.

Iranian President Hassan Rouhani on Sunday blamed the United States for instigating its allies in the Middle East to carry out the attack on an annual military parade in the city of Ahvaz.

"All of those small mercenary countries that we see in this region are backed by America. It is Americans who instigate them and provide them with necessary means to commit these crimes," Rouhani said before leaving for the UN General Assembly in New York.

'Mercenary' allies

Rouhani did not name the "mercenary" US allies, but he could be referring to regional foe Saudi Arabia, and the United Arab Emirates and Bahrain.

Iran has previously blamed Saudi Arabia for supporting Arab separatists in the Islamic Republic. Both countries have been vying for predominance in the region for decades, supporting opposing sides in the civil wars in Yemen and Syria.

The UAE, whose envoy was also summoned by the Iranian Foreign Ministry, denied the allegations.

The "formal incitement against the UAE from within Iran is unfortunate, and has escalated after the Ahvaz attack," Minister of State for Foreign Affairs Anwar Gargash said in a tweet.

'Look in the mirror'

Nikki Haley, US ambassador to the United Nations, rejected Rouhani's accusations.

"He's got the Iranian people ... protesting, every ounce of money that goes into Iran goes into his military, he has oppressed his people for a long time and he needs to look at his own base to figure out where that's coming from," she told CNN. "He can blame us all he wants. The thing he's got to do is look in the mirror."

Ties between Iran and the US have worsened after President Donald Trump abandoned the multilateral Iran nuclear agreement and renewed sanctions on Tehran.

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US-Iran ties: it's complicated

US-Iran relationship: it's complicated

'Deadly and unforgettable revenge'

Iran's elite Revolutionary Guards (the IRGC) vowed to exact "deadly and unforgettable" vengeance for the attack — one of the worst of its kind against the most powerful force of the Islamic Republic — that killed 12 of their members.

"Considering [the Guards'] full knowledge about the centers of deployment of the criminal terrorists' leaders ..., they will face a deadly and unforgettable vengeance in the near future," the IRGC said in a statement carried by state media.

Four gunmen in military uniforms fired on a viewing stand in the southwestern city of Ahvaz where Iranian officials had gathered to watch the annual parade. Women and children fled for their lives, along with soldiers, as gunfire crackled.

The self-styled "Islamic State" has also claimed responsibility for the attack, but like the other militant group, it did not provide any evidence.

US sanctions against Iran are back in effect

Sanctions signed off

US President Trump signed an executive order on August 5 aimed at piling financial pressure on Tehran to force a "comprehensive and lasting solution" to Iranian threats, including its development of missiles and regional "malign" activities. Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences."

US sanctions against Iran are back in effect

Where's the money?

The first phase, which took effect on August 7, targets the Islamic Republic's access to US banknotes, making transactions in a US-dollar dominated financial world difficult. A ban on Iran purchasing precious metals including gold further serves as an attempt to cut the country off from global markets.

US sanctions against Iran are back in effect

Planes, cars and carpets

Phase one also hits key industries including the purchase of commercial planes, cars and carpets. Iranian imports of graphite, aluminum, steel, coal, gold and some software are also affected. German automaker Daimler called off the production and sale of Mercedes-Benz trucks in Iran indefinitely after the sanctions came into force.

US sanctions against Iran are back in effect

Fuel to the fire

A second phase of sanctions — which is due to take effect on November 5 and will block Iran's oil sales — is due to cause more damage. Several countries, however, including China, India and Turkey have indicated they are not willing to entirely cut their Iranian energy purchases.

US sanctions against Iran are back in effect

'Psychological warfare'

Iranian President Hassan Rouhani said that the United States had launched "psychological warfare" against Iran to create division amongst its people. But he insisted that Iran still can rely on its allies China and Russia to keep its oil and banking sectors afloat. He has also demanded compensation for decades of American "intervention" in the Islamic Republic.

US sanctions against Iran are back in effect

EU protection

European Union foreign policy chief Federica Mogherini said the bloc is encouraging small and medium enterprises to increase their business with Iran. She said Tehran has been compliant with their nuclear-related commitments. The EU issued a "blocking statute" to protect European businesses from the impact of the sanctions.